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By Ed Crooks: November 19, 2016

The last rites have been read over the Age of Oil a few times recently, but this week the International Energy Agency suggested there was still plenty of life left in it yet.

In its 2016 World Energy Outlook, the IEA argued that even if the Paris climate agreement were fully implemented, demand for oil would keep rising until at least 2040.

The message was reassuring for oil producers worried that “peak demand” might condemn them to stagnation or decline, or even put them out of business. There was colder comfort, however, in a warning from Wood Mackenzie that big oil companies risked being left behind in the transition to low-carbon energy.

The election of Donald Trump has cast doubt on how fast that transition will go. Matthew Philips at Bloomberg Business Week argued that “clean power is too hot for even Donald Trump to cool”, and Chelsea Harvey made a similar argument for the Washington Post. But Peter Fairley at the MIT Technology Review suggested there was a risk of a significant slowdown in the US renewable energy industry after 2020. 

Moves by the US to put the brakes on for renewables and pull out of the Paris climate accord could create opportunities for China, according to Scientific American. Elon Musk’s Tesla, which has become the flagship company for “clean” energy in the US, succeeded in securing investor support for its attempt to buy the related rooftop solar business SolarCity. The FT’s Lex column, however, was among those raising concerns about the strained finances of the merged group.

At the UN climate talks in Marrakesh, Saudi Arabia’s energy minister Khalid al-Falih offered a tentative welcome to Mr Trump’s warmer tone on oil and gas. Mr Falih argued they would remain “a significant part of the energy mix,” even as the kingdom reiterated its commitment to the curbs on greenhouse gas emissions that it offered at the Paris talks last year.

However, Mr Falih also warned Mr Trump against trying to implement an idea he had floated on the campaign trail: banning US imports of Saudi oil. “Blocking trade in any product is not healthy,” Mr Falih said. John Kemp at Reuters argued that Mr Trump’s words were an “empty threat”. But while the dream of true “energy independence” may be unattainable, North America does seem to have a lot of oil. The Wolfcamp formation in the Permian Basin of west Texas looks like the largest oilfield – depending on your definition of “field” – ever discovered in the US.

The Obama administration scrapped plans to offer leases to drill in the Arctic waters north of Alaska. The US Chamber of Commerce called on Mr Trump “to immediately rescind and replace this plan”, and to open the way to a new round of Arctic drilling. The Arctic Coalition, which includes Alaskan business groups and labour unions, said they were “in strong support of safe offshore Arctic drilling.”

Quote of the week

“I have no idea why they want a reversal because a high price will definitely bring more crude to the market and Opec will further lose [market] share” – Ali al-Naimi, the former Saudi oil minister and architect of the strategy of allowing prices to fall, had lunch with FT and criticised Opec ministers’ plan to abandon that strategy. 

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